Surf Air Mobility (SRFM) Q2 2026 earnings call transcript

Go ahead Thank you operator and good afternoon everyone Welcome to surf air mobility second quarter twenty twenty six earnings call I am joined today by Deanna White our chief executive officer Sean Pausinger our newly appointed chairman of the board Lee and Fayed our co-founder Louis St. Sarah our president of airline operations Joshua Loughton our president of surf on demand and all of our Reeves our chief financial officer Our earnings release can be found on the SEC Edgar website and on our investor relations page at investors. surfair. com Before we begin I want to remind everyone that during today's call we will discuss our outlook and expectations for future performance These forward-looking statements may be preceded by words such as we expect we believe or we anticipate These statements are subject to risks and uncertainties and actual results could differ materially from the views expressed today Some of these risks are set forth in our earnings release and in our periodic reports filed with the SEC We will also present both gap and non-gap financial measures Additional disclosures regarding non-gap measures including a reconciliation of gap to non-gap are included in our earnings release posted on our investor relations website and in our SEC filings I'll now turn the call over to Deanna White Good afternoon everyone The second quarter of 2026 was strong Revenue came in at the high end of our guidance range at 29.5 million and our adjusted EBITDA loss was within our range at 10.5 million In April we announced an improvement to our full year 2026 adjusted EBITDA loss guidance of Approximately 40% compared to what we had previously announced while maintaining our revenue growth target of 20 to 30% over the prior year To achieve this we put specific cost controls and strategies in place across our businesses and We believe these changes have resulted in permanent improvements What makes me most confident about our results is the environment we delivered them in Over the last several months the aviation industry experienced one of the most volatile periods of fuel prices In our case, we also managed through a month of unexpected heavy thunderstorms and flash flooding uncommon in Hawaii affecting our mocha-lailey operations Achieving both our revenue and adjusted EBITDA targets under those conditions Speaks to the durability of our operations and the technology we have built Beyond the financial results the second quarter produced a series of milestones We won our first multi-year surf OS enterprise contract We doubled on-demand private charter revenue in the second quarter compared to the prior year period We reduced our existing convertible note principle by 64% and lowered monthly cash Amortization payments by up to 50% We significantly expanded our partnership with Palantir adding both engineering and business development resources to accelerate the commercialization of surf OS We partnered with beta technologies on landmark demonstration flights of electric aircraft in Hawaii with support from Hawaiian Airlines and We deployed our safety management system a year ahead of the FAA schedule For the last year and a half the first phases of our transformation plan focused on completing foundational work Building surf OS Lowering our cost structure Rationalizing the route network Modernizing the fleet and restructuring our balance sheet Though there will always be more to do the work is now largely behind us We believe the company is in a place for us to pursue revenue growth and profitability at the same time This comes with a major shift in our strategic priorities as we now move into the expansion phase of our transformation plan Which runs now through 2027?

each of our leaders will take you through their second quarter results and key achievements and Then explain in more detail their second half of 2026 priorities Before that I will turn it over to our newly appointed chairman of the board Sean Peltzinger Hi, all for those who I haven't met.

I'm Sean Peltzinger I've served on surf air mobility's board since October 2025 and last month. I was honored to be elected chairman Firstly many thanks to Carl Albert for his leadership over the years and for his continued partnership as chairman emeritus During my decade at Palantir where I served as global head of corporate development I've seen firsthand what the right software can do to accelerate an industry and transition Air mobility is at that moment right now and I believe surf air mobility is perfectly positioned for the opportunity Very few companies sit at the intersection of so many converging growth sectors private aviation AI enabled software and electrification As I said in my shareholder letter last week Our transformation plan was designed to get our house in order first So we could then go after the big opportunity of creating a platform business that we capture value across the industry The team has been successful in the first two phases of that plan We've reduced debt significantly improved profitability in our air mobility business and secured our first multi-million dollar surf OS software contract Winning wheels up is our first enterprise software customer worth up to 12 million dollars over the contract term is not a typical first deal Early enterprise contracts are usually short-term and modest in value Landing a multi-year multi-million dollar contract with one of the largest most recognized names in private aviation as our first customer tells Us the product is working and the market is ready.

We've barely scratched the surface with that I'll turn it over to Liam to talk about our surf OS business Thanks Sean in the second quarter surf OS achieved a major milestone as Sean mentioned We announced wheels up as the launch customer for enterprise broker OS It is an initial two-year term plus an option for a third and we expect to receive up to 12 million dollars over that period As we saw with our own business broker OS will allow wheels up to replace multiple legacy software systems and improve their sales teams efficiency Wheels up is our launch customer for our first commercial product We still have operator OS and owner OS to commercialize this year and continue to explore more ways to apply our surf OS technology Even more broadly We have a current active enterprise pipeline of large operators brokerages and aircraft manufacturers that we believe Could be worth tens of millions of dollars annually in revenue The second point to emphasize from the second quarter is our expanded partnership with palantir that we announced in june Following the success of wheels up enterprise contract.

We substantially increased the size of our engineering team to move even faster In addition palantir added business development and commercial go-to market resources With deep experience in aviation transportation and logistics who are directly involved in our enterprise sales process Through our exclusive agreement their team is in every enterprise conversation And when we're in meetings with prospective customers, we bring the support credibility and technology to close large deals These commercial resources are what will turn our active pipeline into more signed agreements We deployed surf OS features at record pace Crew reserve optimization fuel tracking AI charter price recommendations and AI charter supply sourcing All went live in the second quarter The common theme across these features is that each is designed to find permanent efficiency gains inside our own organization That strengthens the product for external customers We also had the honor of showcasing broker OS at palantir's AIP con in june Where we highlighted the intelligence features and AIP power tools embedded in our software The second quarter proved that the software is needed the market is ready and it's evolving quickly The next phase for surf OS is building on the early success and turning surf OS into a high growth profitable business Here is what we are focused on for the second half of this year First we're working to convert our enterprise pipeline of large operators brokerages and aircraft manufacturers Sales cycles for enterprise clients are typically longer and we are targeting at least one additional enterprise contract before your end Our pipeline is seeded by relationships.

We already have including operators who fly for us Manufacturers we interface with on our aircraft and brokers already transacting on our platform This is yet another advantage of our having an operating business alongside our software Second we are leveraging Palantir's go to market resources which bring enterprise sales and business development expertise We could not build internally on any reasonable timeline Third we are onboarding SMB customers whose sales cycles are considerably shorter and will add additional recurring revenue In addition every operator we add expands our three-sided marketplace because their aircraft supply connects into broker OS for our brokers to sell Fourth we are commercializing our flagship product suite this year Operator OS and owner OS are both planned to launch commercially in the fourth quarter Taking us from one product in market today to three And fifth We will continue deploying high ROI features faster Proving them in our own airline and charter business before selling them externally AI assisted development and the speed of Palantir's platform have compressed our deployment cycle significantly The result of these efforts will be high margin recurring revenue across a diversified software suite Built by an engineering team deploying features an accelerated pace With a healthy customer pipeline our partnership with Palantir and the right team in place We're excited to share more wins and updates as we can virtualize surf OS I will now pass it to lui our president of airline operations Thank you liam the airline performed well this quarter even with some macro trends working against us Few of prices were elevated and hawaii weather drove on plant cancellations Delivering the results we did under those conditions is evidence that the improvements we've made are permanent And they make us more resilient to these sorts of changes in the future Total scheduled service revenue was 17.4 million dollars.

That's down about 20 percent year over year This revenue decrease was deliberate as we exited routes that don't contribute to our bottom line Locally airlines revenue was up about 7 percent compared to the sink order in 2025 and up 15 percent over the first quarter of 2026 We flew more in hawaii this quarter with over 10,000 departures An increase of 3 percent compared to the second quarter of 2025 hawaii is the largest inter-island network by departures and airports served and it's growing While the mainland is right sizing We also introduced two additional caravans into the fleet this quarter as part of our fleet renewal program We are emphasizing our hawaii operations because hawaii will be the showcase And launch pad for electric flight In june betas alia aircraft began flying daily cargo demonstration routes across the islands The infrastructure we've established and the community relationships We fostered in hawaii over the years are exactly what makes it the right place to bring electric aircraft into commercial service Turning to operational performance of our entire scheduled service.

We continue to run a very reliable operation Controllable completion factor ended the quarter at 98 percent Our on time arrivals ended the quarter at 88 percent in on time departures ended the quarter at 83 percent That sustained performance is showing up in our customer satisfaction The reason our performance improved and has maintained is in part from the impact of operator os Let me put a number on that We offset this with operational savings generated directly by operator os This is not a one quarter benefit Those savings are structural. They are already embedded in how we run the operation and they carry forward The team executed exceptionally well to deliver this and they deserve credit for it And finally on safety We completed our safety management system one year ahead of the FAA's mandate Southern is one of only nine part 135 commuter operators in the country with an operational SMS I'll turn it over to josh president of surf on demand Thanks larry surf on demand private charter delivered another exceptional quarter achieving record revenue and record flight volume We nearly doubled our private charter revenue through the first half of 2026 compared to the same period last year In the second quarter alone we generated 12.1 million in revenue with departures increasing approximately 67 percent compared to the second quarter of 2025 Revenue per departure also increased approximately 25 compared to the second quarter of 2025 Reflecting our continued expansion beyond the primarily perboprop focused provider into a full spectrum private charter solution With larger aircraft becoming a greater mix of revenue a few highlights Our new revenue lines cargo wholesale and powered by surf on demand contributed Approximately 14 percent of revenue in the first half of 2026 All of which the gross margin positive The revenue we've added this year particularly in the second quarter is profitable and growing quickly There is still some drag on our overall gross margins and it's important to know that this comes from legacy commitments This cohort of sub-optimal margin products and memberships continues to decrease every quarter and we're confident It does not represent a long-term margin issue Our independent broker program powered by surf on demand Continues to gain momentum and remains a key driver of our growth We've attracted more than 500 applications from around the world since launch and continue to on board high quality charts of professionals each month Who are committed to building long-term business on the platform?

Since launch the program has generated more than 2.5 million dollars in revenue and is gross margin positive Showing that we can scale the platform profitably Several of our top performing independent brokers have each generated hundreds of thousands of dollars in revenue This year demonstrating how broker OS enables experienced charter professionals to build meaningful business with us Our surf on demand scales were strengthening our supply partnerships so that margin expands in parallel with growth We've added another preferred wholesale partner in the second quarter, which is already at 100 utilization We have demonstrated that we can grow rapidly Our next phase is converting that growth into sustainable profitability And we have five primary levers that give us the confidence in that path First, we're improving margin by better leveraging working capital With more capital now available we can secure aircraft inventory in advance and negotiated wholesale rates Rather than sourcing trips on the open market This produces a direct margin improvement on every flight We've proven that we can maximize our preferred wholesale partner inventory and our additional working capital will allow us to pursue this more Second Broker OS is making us more efficient Real-time pricing sourcing and distribution tools help our brokers quote faster and serve more customers The software helped us drive revenue growth in the first half of this year and in the second half it will help us improve margins Third, we're increasing average revenue per flight through continued mix shift towards larger aircraft categories and longer flights Custom is a choosing surf on demand for more of their private aviation needs Which raises revenue per flight whilst we leverage the same platform and infrastructure Revenue per departure has increased each quarter and we expect that trends are continuing Fourth, we're adding independent charter brokers to the platform Every experience broker we add grows more revenue with minimal incremental overhead and the program is already gross margin positive And fifth we're expanding platform participation more broadly by partnering with additional operators and brokers More operators mean more supply for our brokers to sell and more brokers mean more demand for our operators to fill Together these five factors deliver revenue growth and margin expansion at the same time A combination this business is now positioned to achieve after the recalibrations we've made as part of the transformation plan I will now hand it over to Oliver to walk through our second quarter financials Thank you, Josh For the second quarter of 2026 Consolidated revenue was 29.5 million at the high end of our guidance range of 27 to 30 million Up 8 compared to the second quarter 2025 and up 15 compared to the first quarter 2026 Consolidated adjusted e-bidar loss was 10 and a half million within our guidance range Recently we announced two financing transactions designed to strengthen our balance sheet and reduce the future dilution First we refinanced our existing senior secured convertible note The refinancing resulted in the bifurcation of the notes principle into two new instruments A new 17 million convertible note due 2027 and a new 30 million non convertible senior secured term note due 2028 As a result of this action the company successfully reduced its existing convertible note principle by 64 And lowered monthly cash and mortisation payments by up to 50 In addition the new 30 million term note is non convertible and does not amortize or accrue interest until january 2027 Concurrently we also entered into a new 21.6 million asset back loan secured against new and existing aircraft Use of proceeds includes funding the incremental working capital needed to both expand existing wholesale supply relationships And secure additional wholesale supply agreements to improve our private charter margins as Josh explained earlier Please note that the asset back loan funds in two tranches We expect a second funding of 14 million to occur this month further strengthening our liquidity position In summary over the last year we have reduced our total debt levels 50 percent while pushing out our maturity walls Going forward the combination of operating improvements and lower mortizations positions us to approach our go forward capital needs from a position of strength Finally we are reaffirming our four-year 2026 guidance revenue of 128 to 138 million which represents 20 to 30 percent growth over 2025 And an adjusted eber dalos of 30 to 25 million which represents a 40 percent improvement from our previously released guidance For the third quarter we expect revenue of between 35.5 and 37.5 million and adjusted eber dalos of between seven and four million And consistent with what we have said previously we expect adjusted eber dalos to narrow further in the fourth quarter Importantly as we exit a heavy maintenance and capex cycle We expect our free cash flow conversion to improve sequentially and over time converge towards adjusted eber dal To highlight another point for the second half of this year We expect our airline to be a bright spot from a profitability perspective This is a direct result of the investments we have made the technology we have deployed and it reflects the cost actions Louis previously discussed With that I will hand it back to Deanna Thank you all of her This quarter in a genuinely difficult macro environment We finished building the foundation for the next phases of our transformation plan We achieved our guidance through cost control and technology efficiencies We signed our first enterprise software customer We deepened the partnership with palantir We supported the launch of beta's electric aircraft in hawaii And we ended the quarter with a strong balance sheet When we announced in april we could improve our adjusted eber dot guidance by 40 While maintaining our revenue growth this year.

We meant it and this quarter was a start of proving it to you From here our focus is on revenue growth and profitability Thank you to everyone for your continued interest in surfer mobility Operator, let's please open it up for questions We will now begin the question and answer session for analysts with a second q&a session for retail questions to follow For this session we ask that analysts Please limit yourself to one question and one follow up If you would like to ask a question, please press star one to raise your hand To withdraw your question press star one again We ask that you pick up your handset when asking a question to allow for optimum sound quality If you are muted locally, please remember to unmute your device Your first question comes from the line of mike lot more from northland capital markets.

Um, josh, um, our head of on demand. I'll let you answer that question Yeah, absolutely um, thank thank you for your question Um, we we definitely intend to continue to scale our powered by surf on the man program Um, as I sort of mentioned, you know, we we've had overwhelming interest from brokers around the world and wanting to join the program Um, and obviously we want to balance Um, you know quality and make sure that we're bringing on brokers That you know that have a you know have a good knowledge and understanding of the business and can really help us grow it So we do fully intend to continue to scale and bring on board brokers and continue to see growth in the program Did the second part of your question around wholesale relationships and supply relationships?

These remain incredibly important because we need to make sure that our brokers have Excellent supply at their fingertips so that that can be passed on to our customers so we continue to grow so expanding Wholesale relationships with operators is equally as important to us in the second half of this year Uh, and um, you mentioned, you know, um a goal of having another, I think enterprise uh, winds up or wind by End of the year.

Um, thanks Mike for that question. I'll kick it to leon who's uh in charge of the circle s project Hey, mike. Thanks for the question. So we're in several active discussions across all the different products right now Um, we're you know across operator o s, uh, oem as well as as as larger scale brokers So there's you know, we're we're in we have quite a healthy pipeline Um, I think the announcement of wheels up was was really positive one and we have you know We had a pretty healthy pipeline before that and we continue to To develop that pipeline.

Um, I say, um, all over do you want to take that question? Sure. No, but it's it's a pretty good run rate Um, I think that we have said that you know, we're coming out of Some major push on the investment side, uh, for the development of surf o s for example And that should leverage, um, so not with that fact that we have three products as we have mentioned Um, we don't expect the cost to go up conventionally with a number of products So, you know, I think it's a good base adjusted for certain things like that You should do you should be on the right on the right track for operating expenses That sounds good.

Incremental interest now that you have an anchor first customer I I can take that. Um, so first part of the question is, you know, we're we're under integration Uh right now Um, you know with the partnership with palantir and a lot of the infrastructure and kind of the development Uh on the back end it allows us to really stand up instances pretty quickly So we're fully underway and integrating them. We you know, we of that contract We expect to collect about two million half the revenue for for this uh for this year And then starting jan one that will be full four million dollars. Um for for next year So we're we're at the advanced stages of of of setting them up and and implementing All their workflows and everything onto broker o s which is really exciting and then the second part of your question You know post uh wheels up.

We've been getting some additional Uh, you know, what does the pipeline look like and I would answer that uh with yes It's been uh, we've been getting a lot of interest not only across the broker side, but across Operations as well as oem manufacturers, which has been really exciting for us Great.

Hi, um It's it's all over. Uh, I'd like to address that in a number of parts I think that you know during the court a lot of detail was given As to the various businesses and how they're going to inflict towards profitability But let's just break it down by category on the scheduled side if you're really thinking about revenue As we mentioned earlier, we expect the degree of loss of the routes that we are getting out of To to start slowing and so you should see that start showing up in the numbers in the third and fourth quarter On demand. Um, I think gosh is a done a great job of explaining how these going to continue to grow that business At the rates that we've currently been experiencing and uh, we expect also to see some of the first Trigolds of revenue for surf OS start to be recognized in the third and fourth quarter All in all and we're very comfortable with our revenue guidance for The third quarter the implied guidance for the fourth quarter and our guidance for the four year As it relates to adjusted even dark on the scheduled side In my comments.

I mentioned that I expect that to be one of the bright spots of profitability in third and fourth quarter So, uh, you really done a fantastic job there. Um, surf OS has provided some real Improvements in our cost structure as we mentioned in great detail And so I think that that's when you're going to start seeing that flow into the numbers on the charge side As Josh mentioned working capitals particularly important our ability to go in three by supply and then solid and higher margins Uh is going to both catalyze our growth because from a competitive position that's very important to us It also from a profitability standpoint We are going to obviously get some benefit on adjusted even though as we continue to grow that Business and understanding the operating leverage from the type of growth that we're seeing there On the surface side as we start seeing that revenue that will obviously be a significant behind margins which is Where your question is leading to and that starts flowing through in the yet in fourth quarter And on the corporate side and understanding what I said earlier in terms of some of the leverage against um Cost such as uh the investment in surf OS We should also see through uh dnn's leadership some reduction in the operating cost through the cost controls that we have and we continue to implement in this business Great.

Thanks for the question. Uh, it's louis You know we are seeing surf OS And the efficiencies that we're putting into place those are those are long term. These are goes up for a minute Changes that we are making to the airline And so with that, you know, we're able to really kind of fight off the volatility of fuel as it kind of goes up and down and so Really proud of the team in terms of, you know, what they did in q2 And um, we're just going to keep pushing our digitization Uh side, you know, we're not done with the airline. We're going to continue to um Expand what we've started with surf OS and And you know, we're going to continue to Make the airline efficient and that's just going to make us more involved You know, it's it's position of the benefits of all, you know, the volatility that we've seen Got it.

Meaningful standalone revenue line over time So i'll let josh take that question josh Yeah, absolutely great great question. Um You know wholesale Um is an area that as we as we deliver more supply partnerships Will definitely see an increase in In the wholesale division and you know within surf on demand So I do expect to see wholesale to continue to grow When we look at cargo and I also expect that to grow, um, you know whilst we have a very large Uh retail uh charter brokerage that you know, we've grown Um, the the cargo piece is still relatively new. We've had the division for for less than a year Um, and we're already seeing great results from it So um, I expect both of those segments to continue to grow and then as I sort of mentioned earlier The powered by surf on demand which we also, you know, put in that sort of new big business category We absolutely expect that to continue to continue to to scale So, um, I am confident that when we when we speak and get in the future that we'll have seen growth and continued growth in those three Three sort of newer business lines for surf on demand Got it.

Thank you.

So i'll turn that over to lem to answer Thank you diana So as we mentioned our earnings we announced wheels up as sort of our first contract This quarter we have a you know active enterprise pipeline across brokers part 135 operators fleet management companies uh large scale legacy oem's as well as uh next gen sort of electric oem's And you know, we we really believe that you know, there could be tens of millions of annually Uh, the pipeline could be worth tens of millions annually in revenue Um, and that's you know, those are really the partnerships and and enterprise and small businesses across, you know all those different groups that were pretty Um, we're excited about the pipeline and and and um, you know We can't name any of those contracts and throw their obviously sign, but we're in several little active discussions Um, the wheels up sort of demonstrates the product and and and how it works from outside customers And that market is ready and targeting at least one additional enterprise contract before year end is is what we're targeting Um, you know, the pipeline It it really comes from relationships.

We already have plus, you know We have palantirs go to market and commercial team and business development resource That's helping us in all these active conversations, which is really helping us, you know in the pipeline and potentially closing more deals Uh, we're also, you know, actively working on converting, you know, our lois into into paying contracts Which that will you know, we're we're excited to announce more as that that comes to to fruition And that's something well underway. So, you know, as i've mentioned, you know, it's a very active pipeline and we're really Feeling good where where we are now with with the pipeline and it's not just across, you know, one single just broker o s We it's across all the products.

I'll take it in two parts of this. Okay. Yeah, so regarding the 90 continued listing standards on july 30 27 Becoming informal 90 bits intent to cure its long compliance with continued listing standards due to a minimum share price efficiency We're getting compliance requires that the company's 30 day trading average share price It sees a dollar within six months of the receipt of the 90 deficiency notification, which we actually received on July 24, 2027 As we stated in our press release We ambition to cure this minimum price efficiency organically by executing against the next phase of our transformation plan and putting wins on the board However, as a risk miss again, we also requested and receive shareholder approval to effect a reverse stock split At our annual shareholder meeting on July 25th I think it's important to know that this approval is only an authorization to effect a reverse stock split And it is not required account.

These board of directors to implement it We going forward intent closely monitor our stock price over the near term to ensure that we regain listing compliance within the appropriate time frames And as we addressed the second part of your question The recent financing transactions actually reduce shareholders and valuations in a number of ways first be bicycated our existing convertible note into tuning new notes a new $17 million convertible note during 2027 and a $13 million term note during 2028 This financing actually reduces the convertible principle by 64 and reduces cash summarizations by up to 50 percent In addition, the term does not amortize or recruit interest until January 27th Separately our new asset back loan provides incremental working companies the business does not start amortizing until June 20th All these actions combined were specifically structured to reduce shareholder dilution while providing the company with the capital required to excuse times Thank you, Oliver The next question is for Liam again Will palantor and surf air team up and use surface for air traffic management as well?

Thank you, diana So, you know the technology that that we've built. I think the more we deploy tools across our own airline and our own charter operation We're starting to see there's there's other end use cases Which is really exciting, but you know overall surface brings together, you know the data from across 135 aviation ecosystem And we really believe that this data when properly connected and federated there's there's broad applications across many different segments You know, we're we're really really finding more use cases and and markets Which is exciting and you know, we've been involved in in discussions and pursuing opportunities of this matter Nothing to announce today, but but there are you know, we are actively looking at you know Other ways that we can leverage the surf OS technology Within the product set that that we've announced but also other use cases Which we're excited to share more when when we have more news on that front Thanks, Liam.

Okay, so by winning our first enterprise client, you know our pipeline and product development has accelerated and we remain confident in commercializing all those products this year Um, we are in active conversations with large scale aircraft management companies fleet operators least coz and oem's And the timeline just to to reiterate here is broker o s will was was commercially launched and the scale With wheels up this quarter operator o s and owner o s are scheduled to launch commercially by q4 And oemos is in development One thing I will highlight is you know, we are doing beta demonstration flights in hawaii And this is you know, we're starting to build You know, the the foundations for oemos with these trial flights So we're getting data off of the aircraft and we're starting to build Um, what that product will look like and using the trial flights is kind of our our beta Test case study for oemos So so that's that's an important key milestone that we are, you know getting data off of that aircraft And we will be putting into surf o s and starting building the the workflows and agents and and everything around, you know The oem side, which is really exciting Our target is Is to convert at least one additional enterprise client Contract by end of the year, which we're feeling with our pipeline, uh, really positive about Um, we can't comment obviously on the specifics of that contract because it's not closed But like, you know, like i've mentioned across some of these other questions we're feeling, you know Wheels up was sort of our first enterprise client that we announced and we had a very, you know, very healthy uh business development pipeline before and and after Since we've announced that we have even a healthier business development pipeline So we're excited Uh to have more updates and update everyone as as more contracts and we get more customers and revenue over the course of the next quarters Thanks, diana So last question is what are the top three milestones investors should expect over the next 12 months The first is the commercialization of surf o s um Earlier this year we gave some milestones and targets we were looking for Um, obviously for our first enterprise client Um, which we have achieved with wheels up contract And also we plan as leon just mentioned that we'll be adding at least one more from the pipeline that we have on the enterprise Secondly for operator o s We talked about 17 on the lines that we we previously had and adding to 10 more to that That is all in progress.

Some of those, um, discussions are having those um potential clients Skip the lolized stage and go straight to the contract so as soon as we have Something to announce as far as that. Um, we will in the future Of of lolized and in clients by the end of this year and we have one in progress currently Um from and many of the lolized that we have are very interested in going up next to start beyond boarding there For owner o s and we like leon said we plan to launch that into four Our second big milestone Is our surf on demand growth and improving those margins The revenue growth there is the biggest growth for this year driver for the growth of this year And we're also making sure that our growth growth margins profile improves As we get working capital more supplier agreements We add all the new revenue lines that uh josh was mentioned and mentioning and you know, do it more efficient using broker We're shifting our mix in that business to larger aircraft um and the uh powered by surf on demand program with independent brokers is um Bearing a lot of fruit.

We had a target 100 independent brokers to be a part of that program by year end and we've currently Onboarded 50 so halfway there at the end of second quarter The last milestone is profitability, you know, we upped our just to deep adult lost guidance Um in april and you will you will see that narrowing each quarter of 2026 With the airline operations expected to be the most profitable part of the business in the second half Um, and we we reaffirmed our full year guidance both for our revenue and our adjusted even dog loss.